UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________________ to ______________
Commission File No. 0-795
BADGER PAPER MILLS, INC.
(Exact name of registrant as specified in its charter)
Wisconsin 39-0143840
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
200 West Front Street
Peshtigo, Wisconsin 54157
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: (715) 582-4551
Indicate by checkmark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such report(s), and (2) has been subject to such filing
requirements for the past 90 days. |X| Yes. |_| No.
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the last practicable date: 1,978,374 as of August 2, 2000.
<PAGE>
BADGER PAPER MILLS, INC. AND SUBSIDIARY
INDEX
Page No.
PART I. FINANCIAL INFORMATION
Item I. Financial Statements
Condensed Consolidated Interim Statement of Income
Three Months and Six Months Ended June 30, 2000 and 1999 3
Condensed Consolidated Balance Sheet
June 30, 2000 and December 31, 1999 4
Condensed Consolidated Statement of Cash Flow
Six Months Ended June 30, 2000 and 1999 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations. 8
Item 3. Quantitative and Qualitative Disclosures About Market Risk 11
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders 11
Item 6. Exhibits and Reports on Form 8K 12
SIGNATURES
2
<PAGE>
<TABLE>
BADGER PAPER MILLS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF INCOME
(UNAUDITED)
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
(Dollars in thousands, except per share data)
For Three Months For Six Months
Ended June 30 Ended June 30
------------- -------------
2000 1999 2000 1999
------------------- ------------------- ------------------- -------------------
<S> <C> <C> <C> <C>
Net Sales $19,794 $16,668 $38,178 $31,994
Cost of Sales 19,235 14,557 35,965 27,982
------------------- ------------------- ------------------- -------------------
Gross Margin 559 2,111 2,213 4,012
Selling and Administrative Expenses 1,299 1,363 2,584 2,491
------------------- ------------------- ------------------- -------------------
Operating Income (740) 748 (371) 1,521
Interest Expense (310) (264) (591) (536)
Interest Income 16 21 27 57
Non Recurring Life Insurance Proceeds 0 391 0 391
Other Income 36 50 72 80
------------------- ------------------- ------------------- -------------------
Income Before Income Taxes (998) 946 (863) 1,513
Income Tax Expense (340) 321 (294) 514
------------------- ------------------- ------------------- -------------------
Net Income $(658) $625 $(569) $999
------------------- ------------------- ------------------- -------------------
Net Earnings Per Share - Basic $(0.33) $0.32 $(0.29) $0.51
Net Earnings Per Share - Diluted $(0.33) $0.32 $(0.29) $0.51
Average Shares Outstanding - Basic 1,980,140 1,964,852 1,977,328 1,962,927
Average Shares Outstanding - Diluted 1,980,140 1,964,852 1,977,328 1,962,927
Cash Dividends $- $- $- $-
Dividends Per Share $- $- $- $-
</TABLE>
See Notes to Consolidated Financial Statements.
3
<PAGE>
BADGER PAPER MILLS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
June 30 December 31,
(Dollars in thousands) 2000 1999
--------------- --------------
ASSETS:
Current Assets:
Cash & Cash Equivalents $1,137 $669
Certificates of Deposit 100 500
Marketable Securities 119 137
Accounts Receivable, Net 8,397 6,080
Deferred Income Taxes 1,160 1,160
Inventories 6,966 7,819
Refundable Income Taxes 410 220
Other Current Assets 652 606
------------- -------------
Total Current Assets 18,941 17,191
Property, Plant, Equipment &
Timberlands 69,042 67,856
Less: Allowance for Depreciation &
Depletion (42,081) (40,616)
------------- -------------
Total Property, Plant, Equipment &
Timberlands, Net 26,961 27,240
Trade Credits 498 609
Other Assets 1,697 1,854
------------- -------------
TOTAL ASSETS $48,097 $46,894
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current Liabilities:
Current Portion of Long-Term Debt $979 $1,060
Accounts Payable 6,663 4,746
Accrued Liabilities 2,748 3,126
Income Taxes Payable 7 -
------------- -------------
Total Current Liabilities 10,397 8,932
Deferred Income Taxes 1,840 1,840
Long-Term Debt 16,281 15,705
Other Liabilities 619 933
------------- -------------
TOTAL LIABILITIES 29,137 27,410
Stockholders' Equity:
Common Stock, No Par Value 2,700 2,700
4,000,000 Shares Authorized
2,160,000 Shares Issued
Additional Paid-in Capital 183 201
Retained Earnings 17,863 18,432
Less Treasury Shares at Cost: (1,786) (1,849)
181,626 Shares at 6/30/00 and 185,832
Shares at 12/31/99 - -
------------- -------------
TOTAL STOCKHOLDERS' EQUITY 18,960 19,484
------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $48,097 $46,894
See Notes to Consolidated Financial Statements
4
<PAGE>
<TABLE>
BADGER PAPER MILLS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<CAPTION>
(Dollars in thousands)
For Six Months Ended June 30
2000 1999
------------ ----------
<S> <C> <C>
Cash Flows from Operating Activities:
Net Income $ (569) $ 999
Adjustments to Reconcile to Net Cash
Provided By (Used in) Operating Activities:
Depreciation 1,502 1,425
Director's Fees Paid in Stock 45 46
Deferred Income Taxes -- (1)
Changes in Assets and Liabilities:
(Increase) Decrease in Accounts
Receivable, Net (2,317) (738)
(Increase) Decrease in Inventories 853 (2,042)
Increase (Decrease) in Accounts Payable 1,917 1,209
Increase (Decrease) in Accrued Liabilities (378) (40)
Income Taxes Refundable (Payable) (183) (75)
(Increase) Decrease in Other (92) (229)
------- -------
Net Cash Provided by (Used in) Operating Activities 778 554
------- -------
Cash Flows From Investing Activities:
Additions to Property, Plant and Equipment, Net (1,223) (896)
Net Acquisition of Certificates of Deposit 400 496
Proceeds from Life Insurance Benefits -- 391
Proceeds from Sales of Marketable Securities 18 1,213
------- -------
Net Cash (Used in) Provided by Investing Activities (805) 1,204
------- -------
Cash Flows from Financing Activities:
Increase to (Payments on) Long-Term Debt (305) (1,955)
Increase to (Decrease in) Revolving Credit Borrowings 800 (100)
------- -------
Net Cash (Used in) Provided by Financing Activities 495 (2,055)
------- -------
Net (Decrease) Increase in Cash and Cash Equivalents 468 (297)
Cash and Cash Equivalents:
Beginning of Period 669 2,229
------- -------
End of Period $ 1,137 $ 1,932
</TABLE>
See Notes to Consolidated Financial Statements.
5
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Note 1. Basis of Presentation
The accompanying condensed financial statements, in the opinion of
management, include all adjustments which are normal and recurring in
nature and are necessary for a fair statement of results for each
period shown. Some adjustments involve estimates, which may require
revision in subsequent interim periods or at year-end. In all regards,
the financial statements have been presented in accordance with
generally accepted accounting principles. Refer to the financial
statement notes in the Company's Annual Report on Form 10-K for the
year ended December 31, 1999, for the accounting policies which are
pertinent to these statements.
Note 2. Income Taxes
The provision for income tax expense has been computed by applying an
estimated annual effective tax rate. This rate was 34% for the three
and six months periods ended June 30, 2000 and 1999.
Note 3. Earnings per Share
Basic earnings per share amounts are computed based on the weighted
average number of shares outstanding during each period. Diluted per
share amounts equal net earnings divided by common shares outstanding
after giving effect to dilutive stock options granted under the stock
option plan approved by shareholders at the May 11, 1999 annual meeting
of shareholders. The stock options deemed outstanding beginning in the
second quarter of 1999 had an immaterial effect on the weighted average
number of shares outstanding and therefore basic and diluted per share
amounts are the same.
Note 4. Stock Option Plan
Badger Paper Mills, Inc. has elected to follow Accounting Principles
Board Opinion No. 25, Accounting for Stock issued to Employees (APB 25)
and related interpretations in accounting for its stock option plan.
Under APB 25, because the exercise price of the stock options equals
the market price of the underlying stock on the date of grant, no
compensation expense is recorded. Badger Paper is subject to the
disclosure rules of SFAS 123, Accounting for Stock Based Compensation.
Management has determined that the impact of SFAS 123 on net income and
stockholders' equity was not material as of and for the quarter ended
June 30, 2000.
Note 5. Inventories
The major components of inventories were as follows:
(In thousands of dollars) June 30, 2000 December 31, 1999
------------------------- ------------- -----------------
Raw Materials $2,453 $2,551
Finished Goods and Work in Process 8,708 9,339
--------------- ------------------
11,161 11,890
Less: LIFO Reserve (4,195) (4,071)
--------------- ------------------
Total Inventories $6,966 $7,819
=============== ==================
Note 6. Operating Segments
Badger Paper adopted SFAS 131 (Disclosures about Segments of an
Enterprise and Related Information) in 1998. The paper products segment
produces a variety of paper products including fine paper, business
paper, colored paper, waxed paper, specialty coated base papers and
twisting papers. The printing and converting segment prints and
converts flexible packaging materials for the paper products segment as
well as films and non-woven materials from other customers.
6
<PAGE>
The following provides information on the Company's segments for the three
months and six months ended June 30, 2000 and 1999.
<TABLE>
<CAPTION>
(Dollars in thousands)
PAPER PRODUCTS PRINTING & CONVERTING TOTAL
----------------------------- -------------------------------- -----------------------------
For Three Months For Three Months For Three Months
Ended June 30 Ended June 30 Ended June 30
----------------------------- -------------------------------- -----------------------------
2000 1999 2000 1999 2000 1999
------------- -------------- --------------- -------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Net sales to
external customers $ 17,286 $ 14,696 $ 2,508 $ 1,972 $ 19,794 $ 16,668
Intersegmental revenues 571 660 299 375 870 1,035
Segment income before tax (1,396) 789 398 157 (998) 946
Segment assets 43,217 42,311 6,108 5,625 49,325 47,936
<CAPTION>
PAPER PRODUCTS PRINTING & CONVERTING TOTAL
----------------------------- -------------------------------- -----------------------------
For Six Months For Six Months For Six Months
Ended June 30 Ended June 30 Ended June 30
----------------------------- -------------------------------- -----------------------------
2000 1999 2000 1999 2000 1999
------------- -------------- --------------- -------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Net sales to
external customers $ 33,098 $ 28,274 $ 5,080 $ 3,720 $ 38,178 $ 31,994
Intersegmental revenues 1,470 1,398 608 944 2,078 2,342
Segment income before tax (1,807) 1,176 944 337 (863) 1,513
Segment assets 43,217 42,311 6,108 5,625 49,325 47,936
----------------------------------------------------------------------------------------------------
The following is a reconciliation of segment information to consolidated information:
<CAPTION>
For Three Months For Six Months
Ended June 30 Ended June 30
------------- -------------
2000 1999 2000 1999
-------------- --------------- -------------- --------------
<S> <C> <C> <C> <C>
Revenues:
Total net sales for segment $ 20,664 $ 17,703 $ 40,256 $ 34,336
Elimination of intersegment revenues (870) (1,035) (2,078) (2,342)
-------------- --------------- -------------- --------------
Total consolidated revenues $ 19,794 $ 16,668 $ 38,178 $ 31,994
============== =============== ============== ==============
Assets:
Total assets for reporting segments $ 49,325 $ 47,936 $ 49,325 $ 47,936
Elimination of intersegmental receivables (478) (292) (478) (292)
Elimination of intersegmental investments (750) (750) (750) (750)
-------------- --------------- -------------- --------------
Total consolidated assets $ 48,097 $ 46,894 $ 48,097 $ 46,894
============== =============== ============== ==============
</TABLE>
Total segment income, assets and other significant items are the same as
the consolidated information. All operations of the Company are located in
the United States. Revenues from foreign countries are primarily from
Canada and Mexico, and are immaterial to total revenues.
7
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Statement Regarding Forward-Looking Information
This Form 10-Q may include one or more "forward-looking statements" within the
meaning of Sections 27A of the Securities Act of 1933 and 21E of the Securities
Exchange Act of 1934 as enacted in the Private Securities Litigation Reform Act
of 1995 (the "Reform Act"). In making forward-looking statements within the
meaning of the Reform Act, the Company undertakes no obligation to publicly
update or revise any such statement.
Forward-looking statements of the Company are based on information available to
the Company as of the date of such statements and reflect the Company's
expectations as of such date, but are subject to risks and uncertainties that
may cause actual results to vary materially. In addition to specific factors
which may be described in connection with any of the Company's forward-looking
statements, factors which could cause actual results to differ materially
include, but are not limited to the following:
o Increased competition from either domestic or foreign paper producers or
providers of alternatives to the Company's products, including increases
in competitive production capacity, resulting in sales declines from
reduced shipment volume and/or lower net selling prices in order to
maintain shipment volume.
o Changes in demand for the Company's products due to overall economic
activity affecting the rate of consumption of the Company's paper
products, growth rates of the end markets for the Company's products,
technological or consumer preference changes or acceptance of the products
by the markets served by the Company.
o Changes in the price of pulp, the Company's main raw material. All of the
Company's pulp needs are purchased on the open market and price changes
for pulp have a significant impact on the Company's costs. Pulp price
changes can occur due to worldwide consumption levels of pulp, pulp
capacity additions, expansions or curtailments affecting the supply of
pulp, inventory building or depletion at pulp consumer levels which affect
short-term demand, and pulp producer cost changes related to wood
availability, environmental issues, or other variables.
o Unforeseen operational problems at any of the Company's facilities causing
significant lost production and/or cost issues.
o Changes in laws or regulations which affect the Company.
Results of Operations
Net Sales
Consolidated net sales for the second quarter ended June 30, 2000 were
$19,794,000, up 19% from net sales of $16,668,000 for the same three-month
period in 1999. Shipping volumes in the second quarter of 2000 increased 11%
from 1999 despite weak market conditions in the industry, especially the
commodity markets. The average selling price for the second quarter increased
4%.
Consolidated net sales for the six months ended June 30, 2000 were $38,178,000,
an increase of $6,000,000 or 19% from net sales of $31,994,000 for the same
six-month period in 1999. Shipping volumes in the first half of 2000 increased
13% from 1999 despite weak market conditions in the industry. The average
selling price for the first quarter increased 3%.
Net sales for the paper products segment were $17,286,000 for the three months
ended June 30, 2000, which was a $2,590,000 or 18% increase from the same period
in 1999. Shipping volumes for the first quarter increased 11%, over
8
<PAGE>
the comparative period in 1999, while the average selling price increased 4%
from the second quarter last year. The net sales of the paper products segment
represented 87% of consolidated net sales during the quarter.
Net sales for the paper products segment were $33,098,000 for the six months
ended June 30, 2000, which represents a 17% increase from the same period in
1999. Shipping volumes for the first six months increased 13% over the
comparative period in 1999, while the average selling prices increased 3% from
last year. The increase in the average selling prices was primarily the result
of the continuing change in our product mix from lower margin commodity paper
products to higher margin specialty paper products. Market pressures have
generally prevented the Company from increasing selling prices to fully recover
costs associated with increased pulp prices. The net sales of the paper products
segment represented 87% of the consolidated net sales for the first six months
of 2000.
Net sales for the printing and converting segment were $2,508,000 for the three
months ended June 30, 2000, which was a $536,000 or 27% improvement over the
same period in 1999. The net sales of the printing and converting segment
represented 13% of the consolidated net sales during the quarter.
The printing and converting segments' net sales for the six months ended June
30, 2000 were $5,080,000, which was a $1,360,000 or 37% improvement over the
same period in 1999. The net sales of the printing and converting segment
represented 13% of the consolidated net sales for the first six months of 2000.
Gross Profit
Consolidated gross profit for the second quarter ended June 30, 2000 was
$559,000 or 3% of net sales, compared to gross profit for the same period in
1999 of $2,111,000 or 13% of net sales.
The consolidated gross profit for the six months ended June 30, 2000 was
$2,213,000 or 6% of net sales, compared to gross profit for the same period in
1999 of $4,012,000 or 13% of net sales.
Gross profit for the paper products segment was $41,000 for the three months
ended June 30, 2000, a $1,778,000 decrease from the same period in 1999. The
decrease in gross profit in the second quarter can be attributed to the
continuing escalation of pulp prices, scheduled down time on the paper machines,
reduced operating on the Fourdrinier paper machine and increased natural gas
prices.
The gross profit for the six months ended June 30, 2000 for the paper products
segment was $1,042,000, a decrease of $2,368,000 from the same period in 1999.
The decrease in gross profit in the first six months of the year can be
attributed to escalating pulp prices, reduced operating efficiencies on our
paper machines and increased natural gas prices.
Pulp prices increased 9% in the second quarter of 2000 and 40% in the last
twelve months, and are escalating more rapidly than the market prices of our
paper products. We continue our efforts to increase selling prices as the market
permits. The paper machines' operating efficiencies were impacted by a scheduled
week of downtime in May 2000 for inventory control, higher than normal fiber
losses and quality issues on the Fourdrinier paper machine. Natural gas prices
have increased 119% since year-end 1999 with a dramatic 87% increase in June
2000.
The printing and converting segments' gross profit was $518,000 for the three
months ended June 30, 2000, a $226,000 or 77% improvement over the same period
in 1999. The printing and converting segments' gross profit for the six months
ended June 30, 2000 was $1,171,000, a 98% improvement over the same period in
1999. The dramatic increase in gross profit is attributed to increased tissue
wrap business and more efficient operations due to longer production runs.
Selling and Administration
Consolidated selling and administration expenses were $1,299,000 for the three
month period ended June 30, 2000. This represents a decrease of $64,000 when
compared to the same period of 1999. Selling and administration expenses for the
six months ended June 30, 2000 were $2,584,000 or a $93,000 increase over the
same period in 1999.
9
<PAGE>
Selling and administration expenses for the paper products segment were
$1,112,000 for the three month period ended June 30, 2000. This was a decrease
of $88,000 when compared to the same period of 1999. Selling and administration
expenses for the six months ended June 30, 2000 were $2,214,000 or a $41,000
increase over the same period in 1999.
The printing and converting segments' selling and administration expenses were
$187,000 for the three month period ended June 30, 2000, an increase of $24,000
over the same period of 1999. Selling and administration expenses for the six
months ended June 30, 2000 were $370,000 or a $53,000 increase over the same
period in 1999.
Other Income and Expense
Other expense for the three-month period ended June 30, 2000 was $258,000
compared to $198,000 other income for the same period last year. Other expense
for the six-month period ended June 30, 2000 was $492,000 compared to $8,000 for
the same period last year. A majority of the other expense in 2000 is interest
on long-term debt.
In the second quarter of 1999 Badger Paper received $622,000 of life insurance
proceeds as beneficiary upon the death of a former President on March 23, 1999.
The proceeds included $231,000 of cash surrender value carried as other assets
on our balance sheet and $391,000 of non-recurring income. The funds were used
for debt reduction.
Net Income
Consolidated net earnings for the three months ended June 30, 2000 were a net
loss of $658,000, which is a $1,283,000 decrease from the $625,000 net profit
for the same period in 1999. The net loss of the paper products segment was
$921,000 for the three months ended June 30, 2000 compared to $521,000 net
income for the same period in 1999. The net income of the printing and
converting segment was $263,000 for the three months ended June 30, 2000,
compared to $79,000 net income for the same period in 1999.
Consolidated net earnings for the six months ended June 30, 2000 were a net loss
of $569,000, which was a $1,568,000 decrease from the $999,000 net profit for
the same period in 1999. The net loss of the paper products segment was
$1,193,000 for the six months ended June 30, 2000 compared to $776,000 net
income for the same period in 1999. The net income of the printing and
converting segment was $623,000 for the six months ended June 30, 2000, compared
to $222,000 net income for the same period in 1999.
Capital Resources and Liquidity
As of June 30, 2000, the Company's capital resources for funding ongoing
operations include $1,356,000 of cash and marketable securities and its
$12,000,000 revolving credit facility. Borrowing under this facility totaled
$11,500,000 as of June 30, 2000. Pursuant to the terms of the revolving credit
facility, the Company is making quarterly payments of $140,000 and made an
annual payment of $400,000 on July 1, 2000 on its outstanding Industrial
Development Revenue Bonds.
On May 25, 2000, the City of Peshtigo refinanced the Company's Urban Development
Action Grant, which was scheduled to mature in April 2000. The terms of the
refinanced $1,500,000 note provide for monthly payments of $15,090.83 for ten
years at a 5% interest rate.
Covenants related to the revolving credit facility include, among other items,
that the Company maintain a fixed charge ratio, a debt coverage ratio and a
limitation on capital expenditures. At June 30, 2000, the Company was not in
compliance with the fixed charge ratio or the debt coverage ratio, and obtained
a waiver related to this noncompliance. As amended on August 10, 2000, the
revolving credit facility contains certain covenants that maintain a minimum
cumulative EBITDA and provides limitations on capital expenditures. The
covenants to maintain a specified fixed charge ratio and debt leverage ratio
have been waived until June 30, 2001.
Cash and cash equivalents provided by operations and borrowings under the
Company's revolving credit facility, are expected to be sufficient to meet
current and anticipated working capital needs, as well as fund the Company's
planned capital expenditures, for the next twelve months.
10
<PAGE>
Capital Expenditures
Capital expenditures during the first six months of 2000 were $1,223,000,
compared to $896,000 for the same period in 1999. Major projects in 2000 for the
paper products segment include an increase in the run speed of the Yankee paper
machine, a hole detector on the Fourdrinier paper machine, a precision
folio-size sheeter, and drive replacements on the Fourdrinier paper machine.
Major projects at the printing and converting segment are a slitter/rewinder and
press department improvements.
Cash Flows
Cash provided by operating activities was $778,000 for the six months ended June
30, 2000, which compares to $554,000 for the same period in 1999. The material
change in cash provided by operations were the net losses in the first half of
the year. The Company took downtime in May to reduce inventories by $1,336,000,
or 13%. Growth in sales has increased the accounts receivable balances while
maintaining acceptable aging on the accounts. Rapidly escalating pulp prices
have increased accounts payables over last year's levels.
Net cash used in investing activities was $805,000 for the six-month period
ended June 30, 2000 compared to $1,204,000 cash provided for the same period in
1999. The cash generated in 1999 resulted primarily from proceeds from sales of
marketable securities held by the Company, which proceeds were used to make
payments on the Company's Industrial Development Revenue Bonds, and proceeds
from a life insurance policy for which the Company was a beneficiary.
Net cash provided by financing activities was $495,000 for the first six months
ended June 30, 2000, which compares to a $2,055,000 net cash used in financing
activities for the same period in 1999. Payments on long-term debt in 1999
included special payments of $1,885,000 on the Company's Industrial Development
Revenue Bonds.
Item 3. Quantitative and Qualitative Disclosure About Market Risk
The Company is exposed to market risk from changes in interest on its long-term
debt. The interest rates disclosed in the Company's Annual Report on Form 10-K
for the year-ended December 31, 1999, have not materially changed.
Although a majority of the Company's debt is at variable interest rates,
management believes the Company's exposure to interest rate fluctuations is
immaterial to the consolidated statements.
The Company does not use financial instruments for trading purposes and is not a
party to any leveraged derivatives.
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
(a) The Annual Meeting of Shareholders of Badger Paper Mills, Inc. was
held at 10:00 a.m., Tuesday, May 9, 2000, at the Best Western
Riverfront Inn, 1821 Riverside Avenue, Marinette, Wisconsin 54143.
(b) Two directors, whose terms expire at the 2003 Annual Meeting, were
elected at the May 9, 2000 Annual Meeting by a vote of at least
1,461,388 shares "for", and at least 356,741 shares withheld. The
elected directors were L. Harvey Buek and Thomas W. Cosgrove. The
directors continuing in office are Thomas J. Kuber, whose term
expires at the Annual Meeting in 2001, and Mark D. Burish and
James L. Kemerling, whose terms expire at the Annual Meeting in
2002.
11
<PAGE>
(c) The shareholders voted against a shareholder proposal requesting
that shareholder approval be required for any sale, lease or other
disposition of 5 percent or more of the assets of the Company. The
vote tallied was 434,510 shares "for", and 1,029,081 shares
"against" such proposal, with 9,045 shares abstaining.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
(27) Financial Data Schedules
(b) Reports on Form 8-K:
None
12
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
BADGER PAPER MILLS, INC.
(Company)
DATE: August 14, 2000 By /s/ Thomas W. Cosgrove
Thomas W. Cosgrove
President
(Chief Executive Officer)
DATE: August 14, 2000 By /s/ George J. Zimmerman
George J. Zimmerman
Treasurer
(Principal Financial Officer)
13
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EXHIBIT INDEX
Exhibit No. Description
(27) Financial Data Schedule
